NYSE Temporarily Reduces Market Capitalization Requirement to $15 Million

January 23, 2009

On January 22, 2009, the New York Stock Exchange LLC (the "NYSE") filed a rule change with the Securities and Exchange Commission (the "SEC") that proposes to temporarily reduce from $25 million to $15 million the average market capitalization required of listed companies under Section 802.01B of the NYSE’s Listed Company Manual (the "NYSE Manual").  If, as expected, the SEC waives a 30-day operative delay under SEC rules, the temporary reduction will become effective immediately and will apply through April 22, 2009.  All of the NYSE’s other continued listing criteria will continue to apply during this period.

Section 802.01B of the NYSE Manual provides that the NYSE will promptly initiate procedures to suspend trading and delist any company—including limited partnerships and real estate investment trusts ("REITs")—that has an average global market capitalization over a consecutive 30 trading-day period of less than $25 million, without the opportunity for the company to cure. This rule applies regardless of the listing standard that the company relied upon when it originally was listed. Under the proposed rule change, through April 22, 2009, Section 802.01B of the NYSE Manual will apply only to companies—including limited partnerships and REITs—whose average global market capitalization over a consecutive 30 trading-day period falls below $15 million.

The lowered $15 million standard will be applied to any company for which the NYSE did not announce a suspension of trading pending delisting on or before January 22, 2009.  This will include any company whose suspension under the $25 million standard had been stayed pending appeal. These companies will benefit from the lowered standard, assuming they are and remain above the requisite $15 million average market cap.  The lowered $15 million standard will not be applied to any company for which the NYSE announced a suspension of trading on or before January 22, 2009.

The proposed rule change can be found at: http://www.nyse.com/Frameset.html?displayPage=http://apps.nyse.com/commdata/pub19b4.nsf/rulefilings?openview

Gibson, Dunn & Crutcher’s Securities Regulation and Corporate Governance Practice Group is available to assist in addressing any questions you may have regarding these issues.

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